Eircom tactics still a problem, says Esat BT

27 Jan 2004

Aggressive customer win-back tactics by incumbent operator Eircom against competing licensed telcos are still being played out in the Irish market, despite claims by ComReg this afternoon that the problem had been rectified.

Along with local loop unbundling, carrier pre-select (CPS) and single billing are seen by telcos as one of the major hurdles they face when trying to get customers to sign up for their services. CPS enables consumers to exercise their choice by selecting in advance a specific operator to carry some or all of their telephone calls.

This afternoon, the Commission for Communications Regulation (ComReg) issued a statement confirming that Eircom had breached its obligations under a CPS Code of Practice. The nature of the breach involved Eircom’s field sales personnel misleading customers when making a comparison between Eircom and Cinergi Telecom’s call rates.

ComReg said that it was satisfied that the breach of the Code of Practice by Eircom was rectified.

The CPS Code of Practice covers customer contracts, use of customer information, order-handling processes, promotion of CPS, bill payment, tariff presentation, complaint and enquiry handling and the activities of the telecom service providers to “win back” lost customers. ComReg said that it would continue to investigate alleged breaches of the Code of Practice on an ongoing basis.

However, this afternoon a spokesperson for Esat BT alleged that Eircom is still engaged in aggressive customer “win back” tactics in the Irish market. “We are still seeing it,” the spokesperson told siliconrepublic.com. “Allegedly CPS is alive and kicking. But as far as we are seeing in terms of the activities going on in the marketplace, the CPS Code of Practice is not worth the paper it is printed on.”

Last summer, various operators, including Esat BT and Cinergi Telecom, complained that Eircom was engaging in aggressive customer win back tactics, including Eircom field sales personnel using misleading information on call rates as well as using knowledge of customers intending to switch to alternative operators to issue marketing literature aimed at winning them back.

Esat BT told siliconrepublic.com last June that for every 3,000 new customers they signed up, they lost 2,000 through aggressive marketing tactics by Eircom. At that time the spokesperson said: “When a customer wants to switch phone services, once we notify Eircom about the transfer, within 24 hours Eircom are posting out letters from their marketing department and contacting our customers. Customers we have signed up end up returning to Eircom. It is ferociously aggressive. For every 3,000 new customers we sign up, we lose 2,000 on churn. It will be very hard going for a licensed operator until single billing is put in place,” the spokesperson told siliconrepublic.com.

As well as dealing with aggressive win back strategies, the Irish telecoms market has yet to see the introduction of universal single billing, which will allow other licensed operators to integrate line rental into the one bill without customers having to receive a second bill from Eircom. Supposed to have been launched in January last year, single billing has been continuously postponed, pending the installation of the appropriate computer equipment as well as Eircom submitting the terms and conditions for a commercial arrangement between licensed operator sand the incumbent player.

Tomorrow, Eircom goes before an Oireachtas Committee on Communications to explain its recent decision to hike up line rental rates, the third such increase in a single calendar year.

This afternoon, the Esat BT spokesperson told siliconrepublic.com: “The practices that ComReg hoped to eliminate from the market on the back of the CPS Code of Practice are absolutely alive and kicking. We hear about these practices from prospective customers quite frequently telling us about what Eircom are saying in the market about us and misrepresenting competitors’ rates.”

In terms of single billing, the spokesperson told siliconrepublic.com that the independent licensed telcos in the Irish market are still being prevented from offering single bill services – five years since deregulation of the telecoms market begin in 1999.

“The new regulator John O’Doherty has said that he was determined single billing would happen by March. We are not optimistic about this at all. The reality is that wholesale telecom services in Ireland are flawed until single billing becomes a reality and the problem is far from closure. Single billing would be the one golden opportunity for licensed telecom operators to go after the market in a meaningful way,” she told siliconrepublic.com.